Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Voluntary dismissal of mislabeling claims against almond milk producer granted, (Feb 13, 2015)

By Linda O’Brien, J.D., LL.M.

In an action by a purchaser challenging the labeling of almond milk products as “All Natural” and listing of the sweetener used as “evaporated cane juice” instead of sugar, the federal district court in San Jose, California has granted the purchaser’s motion to voluntarily dismiss his complaint (Werdebaugh v. Blue Diamond Growers, February 11, 2015, Koh, L.).

Blue Diamond Growers is a leading producer of almond milk products and snack foods and sells its products to retailers and distributors for eventual sale to consumers at grocery and other retail stores. After purchasing several cartons of Blue Diamond’s almond milk, Chris Werdebaugh filed a putative class action suit, alleging, in part, violations of California’s Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumers Legal Remedies Act (CLRA). Specifically, Werdebaugh contended that the terms “All Natural” and “evaporated cane juice” on the product’s label were false, misleading, and unlawful.

In October 2013, the court denied Blue Diamond’s motion to dismiss. In January 2014, Werdebaugh’s motion for class certification of a damages class was granted. Werdebaugh filed an amended complaint, and in December 2014, Blue Diamond moved to decertify the damages class, which was granted by the court. Werdebaugh’s motion to reconsider the order decertifying the class then was denied. Subsequently, Blue Diamond filed a motion for summary judgment, which was set for hearing. Shortly before the hearing date, Werdebaugh filed a motion for voluntary dismissal with prejudice.

Voluntary dismissals are subject to the discretion of the court unless a defendant could show it will suffer some plain legal prejudice as a result, the court explained. Blue Diamond contended that the plaintiff failed to offer a sufficient explanation for his motion and the defendant’s motion for summary judgment was fully briefed and ripe for adjudication. Werdebaugh explained that, since the damages class was decertified and settlement discussions had reached an impasse, he no longer wished to pursue the action.

The court determined that Blue Diamond was unable to show that it would suffer plain legal prejudice as a result of the plaintiff’s voluntary dismissal with prejudice. The fact that there were three other substantially similar cases pending against Blue Diamond in other state courts did not add an extra burden to Blue Diamond, since it was already engaged in defending the state court case. Although a resolution of its pending motion for summary judgment would be helpful in the other actions, that possibility did not rise to the level of prejudice to a legal interest. A voluntary dismissal with prejudice did not prevent the defendant from raising any specific defenses or otherwise jeopardize Blue Diamond’s ability to make the same arguments in other forums, in the court’s view.

Finally, in granting the plaintiff’s motion, the court noted that the order did not preclude any timely, independent motion by the defendant for attorneys’ fees and costs.

The case is No. 12-CV-02724-LHK.

Attorneys: Ben F. Pierce Gore (Pratt & Associates) for Chris Werdebaugh. Lawrence M. Cirelli (Hanson Bridgett LLP) for Blue Diamond Growers.

Companies: Blue Diamond Growers

Cases: Advertising StateUnfairTradePractices CaliforniaNews